The dollar could turn lower again as rally met daily trend resistance

The dollar seemed to move down slightly against a basket of six majors with possibility of breaking below its trading range since last Thursday despite trading within the range for at the writing of this article Tuesday moon BJT.

We should watch January CPI and RPI in U.K today as the British pound traded sideways.

All the three major U.S. indexes rebounded slightly on Monday 12 Feb while the dollar seemed to move down slightly against a basket of six majors with possibility of breaking below its trading range since last Thursday despite trading within the range for at the writing of this article Tuesday moon BJT. The euro and the Aussie dollar fared stronger among non-USD currencies while the British pound and Japanese yen tended to trade sideways. We should watch January CPI and RPI in U.K today.

Technical

The dollar index (DXY) whipsawed around its long term moving averages, under slight pressure in the short term. A cross-below its long term moving averages seen in its short term moving averages could validate a change in its trend on the 1 hour chart.

（DXY H1 chart）

As to non-USD currencies, the euro broke above its descending trend line in a 3-wave bullish move pattern, with upside resistances on the 4 hour chart. The British pound corrected its prior sharp decline on last Friday in a choppy market through time rather than price. Look at the short-term direction in the sterling. The Aussie dollar fared significantly stronger among non-USD currencies. The commodity currency rallied further in a choppy move to test its H4-period trend resistance.

（AUDUSD H4 chart）

Switching gears to precious metals, the gold whipsawed around its H4-period trend resistance, except sharp rise in early Monday session. Look for a potential bullish breakout today after extended period of declines. In addition, whether or not the yellow metal could clear its resistances both at EMA144 and EMA60 on the 4 hour chart will also be important to watch.

（Gold H4 chart）

By JasonZou —— Chief Analyst of AvaTrade China

Disclaimer: The views and opinions expressed in this article are those of the authors and for the purpose of reference only, and shall not be relied upon by investors in making any trading decisions.